Donna Boehme Principal, Compliance Strategists LLC, RAND Center for Corporate Ethics and Governance, Corporate Counsel
What caught my eye last week was the Wall Street Journal story that some UK banks, under fire from regulators for their “profit over ethics” culture, had hired a professor known as “Weirdy Beardy” to help them change all that.
Because everyone knows that when you want to change your firm culture, you go out and retain a 56-year old self-described “corporate philosopher,” right?
Reportedly part of Weirdy Beardy’s £660/hour methodology to improve how bankers behave at work involves sitting with executives and asking questions such as “Why do you exist?” and “Who are you?”
Jack Handey’s “Deep Thoughts” from the American late-night television show Saturday Night Live leaps to mind, and if you haven’t seen the one about Disneyland, Google that right now! But I digress.
According to the Wall Street Journal, this is the point at which some of the bankers cry. I am not making this up.
The goal is sensible enough: to create a work environment where staff self-regulate.
And in view of last year’s Barclays “Shreddergate” in which a senior exec commissioned an ethics report, but was so upset by its contents that he shredded what he thought was the only copy … only it wasn’t, all you can say to the UK watchdogs is “What took you so long?”
We interrupt this column to bring you more deep thoughts from Weirdy Beardy:
“You have to be the grit in the oyster, you have to be the person who asks the difficult questions. From that grit, the pearls of wisdom are created.”
The WSJ article goes on to describe bank executives visiting orphanages in Africa, forming a choir, picking up garbage on the side of the road, and attending group “culture sessions.” OK, I admit it, I made up the part about the garbage- but you get the point.
Here’s the problem with that: Although it’s tempting to believe that culture can be “changed” by outsourcing it, or by arranging a “one and done” executive retreat, it can’t. If it were that easy, everyone would do it.
Culture is “the way things are done around here” – the product of many acts, decisions, conversations, internal controls, reward and discipline systems, among other important aspects of a company’s working environment.
A company committed to a culture of ethical leadership needs more than publicity stunts calculated to impress regulators.
As noted in a 2013 RAND Symposium report on corporate culture and ethical leadership, it needs a robust compliance program, and often, a series of visible incentive, transparency and accountability interventions, among other steps.
I have a suggestion
Instead of sending 300 managing directors to offsite “culture school” where they no doubt will practice crossing a symbolic wobbly bridge and falling backwards into their team members arms, how about they spend those two days with the CEO and top execs discussing expected ethical leadership behaviors on which they will be graded, going forward?
How about revamping the incentive system, including tying the entire annual bonus, and future promotions, to achieving a minimum score from one’s direct reports, manager and peers, to that ethical leadership score?
And while you’re at it, how about identifying some bad apple leaders who do not fit the desired culture, and helping them swiftly out the door?
An independent, empowered, chief compliance officer with resources can facilitate all these efforts.That’s because, as noted in the RAND report, there is only one way to support an environment where staff self-regulate and that is to have in place a strong, well-designed and implemented compliance program, where employees are coached, monitored and incentivized to follow desired behaviours, and to report any problems they see.
Unless those banks change the drivers of behaviour, through role modeling, incentives, monitoring and discipline, no amount of “deep thoughts” or group exercises on a bridge, are going to make a scintilla of difference.
Memo to Bank of Scotland, HSBC, Barclays, RBS, Citigroup and all your regulators and global counterparts: What you need is a serious internal approach to compliance, monitoring, targeted incentives, discipline and visible ethical leadership –you can skip the crying bankers–and maybe you’ll start to get somewhere.
And if I’ve just saved you a trip to Africa, you’re welcome.